Section Two

Arguments Against the Protecting Duty Summarized Through an Analysis of Its Major Consequences, continued (Part 3)

2.65

Having examined the effects of the protecting-duty monopoly to the mechanical class, to test its professions of friendship for that class, let us proceed to enquire how it will promote the interest of the agricultural class, for which its friendship is equally sincere—indeed it professes to be a general friend. We have seen that its effect in establishing a perfect monopoly of mechanicks by capitalists, does not promote the wealth or respectability of these mechanicks; and it is now to be considered, whether an imperfect monopoly of agricultural profits, though it does not enslave the persons of the farmers, differs from a complete monopoly of mechanicks, and the profits of their labour, except as partial pilferings differ from a total robbery. By supposing that the farmers were reduced to the situation designed for mechanicks, that is, to work for daily wages, we shall get a clear view of the nature of the protecting-duty policy. When a combination of capitalists can both coerce persons and reap the profit of their labour, we have seen that this perfect operation of their monopoly, does not promote either the wealth or respectability of these persons. Such a system, rendered perfect as to farmers, must of course operate upon them as it does upon the mechanicks. But it only operates upon farmers imperfectly, by transferring a portion of their profits to capitalists, by the simple but effectual mode of creating an artificial scarcity of necessaries and comforts, to be supplied by capitalists at enhanced prices. If, however, we include every description of income-men without labour, we may very safely conclude, that all the profits of farmers, like those of factory mechanicks, are now reaped by capitalists of some kind or other. The farmers then are already invested with half the situation of factory mechanicks; their persons are freer, but the profits of their labour go to capitalists. In fact the whole United States are, by the protecting-duty laws, turned into one great factory, and all the people are placed upon the factory regimen as to profits. These are transferred by laws to a vast pecuniary aristocracy, just as the profits earned by factory labourers go to an owner. If we admit that it is as hard to get out of our country as out of a factory, our persons also are under restraint like mechanicks in a factory and the similitude between the mechanicks in a factory, and the farmers in their own country, under the protecting-duty policy, becomes complete. Both are sufficiently incarcerated to be under a necessity of yielding up the profits of their labours to a combination of legal capitalists.

2.66

Intricate as the science of political economy has been rendered, by the artifices of exclusive privileges, it yet contains some principles so undeniable, as to explode the whole mass of partial and perplexing calculations, used to conceal or evade them. Among these principles the most important is, that land is the only, or at least the most permanent source of profit; and its successful cultivation the best encourager of all other occupations, and the best security for national prosperity. If this principle can maintain itself against the sophistry of exclusive privileges in any country, it must be in the United States. If the cultivation of land flourishes, all other occupations prosper; if it languishes, they decay. Malthus in his late able treatise upon political economy*34 observes, "that the causes which lead to a fill of rents are, as may be expected, exactly opposite to those which lead to their rise; namely, a diminished capital, diminished population, a bad system of cultivation, and the low market-price of raw produce. They are all indications of poverty and decline, and are necessarily connected with throwing inferior land out of cultivation, and the continual deterioration of land of a superior quality." To prevent this general national decline, agricultural capital (the capital he means) is indispensable. If that is deficient, the most efficacious security against national poverty, and the most efficacious excitement of talents and industry, are lost. Profits are the rents of land-owners in the United States. The policy of diminishing these profits to increase the wealth of exclusive privileges, has already produced those indications which Malthus foretels. The cultivation of inferior lands has been thus rendered wholly unprofitable. The lands of the United States are chiefly of this quality. Good land is continually impoverished. Both effects proceed from the property or profit-transferring machines, called exclusive privileges, and government extravagance. It is admitted by the Committee, that exuberant capitals have been accumulated in a few hands, but that agriculture wants them. What can have produced the want, but the accumulation? Then this very accumulation has produced our national decline, by robbing agriculture of the capital by which only this decline can be prevented. Why has the accumulated capital been unable to find employment in our spacious country, where capital has been so successfully employed for two centuries, under provincial disadvantages, and all the sufferings from foreign restrictions? It is because exclusive privileges, which bestow the capital, are too wise to invest it in an occupation, the profits of which are tapped perpetually by their various gimlets. Capital, like rats, deserts a filling house; and who can so well discover that the dwelling is ruinous, as those who are gnawing it down. Capitalists will no longer invest their money in agriculture, because that very money demonstrates to them, that agriculture can no longer be profitable. Is it not highly unreasonable that the capitalists should be continually pressing for augmentations of income, when the agricultural occupation is already reduced by the transfers of its profits, to such a state, that they will not in this wide country, abounding in a choice of climates, soils, and products, venture their money in so hopeless a business? And are they not perfectly right? Who in his senses would place his money where it would certainly be taken away by a combination of which he is himself a party?

2.67

Not pretending to any authority myself, it may be excusable to insert several other quotations from Malthus, the latest, and perhaps the ablest of the English economists. He vindicates to a great extent the doctrines of Adam Smith. But what is authority? Fashion only. A great man, discerning that the doctrines of Adam Smith or Malthus are hostile to his views, has only to say that they are calculated to do much mischief, and the watch-word is caught and disseminated by his admirers, his flatterers and accomplices. Avaricious or ambitious authority, purchased by bribes or patronage, is opposed to honest authority, only sustained by truth. The inquisition itself was defended by this species of authority, because it was a mode of getting power and money. Thus, the authority of all writers on the side of justice, liberty, and good government, is invariably undermined. It is perpetually assailed by exclusive privileges, monopolies, frauds, ambition, and avarice, to deprive mankind of the only beacons which can warn them of the approach of those enemies, by which their prosperity and happiness are destroyed. The following quotations from Malthus are therefore offered, not as authority, but as appeals to the understanding of the reader.

2.68

He observes,

that the fertility of land, either natural or acquired, may be said to be the only source of permanently high returns of capital. In the earlier periods of history, monopolies of commerce and manufactures produced brilliant effects, but in modern Europe there is no possibility of large permanent returns being received from any other capitals, than those employed on land. But that capitals employed on land, may sometimes yield twenty, thirty, forty, fifty, or even sixty per cent. A striking illustration of the effects of capitals employed on land, compared with others, appeared in the returns of the property tax in England, which yielded six and a half millions from their income, whereas those employed in commerce and manufactures, only yielded two millions.

2.69

Another most desirable benefit belonging to a fertile soil is, that states so endowed, are not obliged to pay much attention to that most distressing and disheartening of all cries to every man of humanity; the cry of the master-manufacturers and merchants for low wages, to enable them to find a market for their exports. If a country can only be rich by running a successful race for low wages, I should be disposed to say at once—perish such riches. The peculiar products of a country, will generally be sufficient to give full spirit and energy to all its commercial dealings, both at home and abroad; while a small sacrifice of produce, that is, the not pushing cultivation too far would, with prudential habits among the poor, enable it to maintain the whole of a large population in wealth and plenty.

2.70

It will readily be allowed that an increase in the quantity of commodities, is one of the most desirable effects of foreign commerce; but I wish particularly to press on the attention of the reader, that, in almost all cases, another most important effect accompanies it, namely, an increase in the amount of exchangeable value. And that this latter effect is so necessary, in order to create a continued stimulus to productive industry, and keep up an abundant supply of commodities, that in the cases in which it does not take place, a stagnation in the demand for labour is immediately perceptible, and the progress of wealth is checked.

2.71

It cannot for a moment be doubted, that the annual increase of the produce of the United States of America, estimated either in bullion or in domestick and foreign labour, has been greater than that of any country we are acquainted with, and that this has been greatly owing to their foreign commerce, which, notwithstanding their facility of production, has given a value to their corn and raw produce, equal to what they bear in many countries of Europe, and has consequently given to them a power in commanding the produce and labour of other countries quite extraordinary, when compared with the quantity of labour which they have employed.

2.72

What I wish specifically to state is, that the natural tendency of foreign trade, as of all sorts of exchanges by which a distribution is effected, better suited to the wants of society, is immediately to increase the value of that part of the national revenue which consists of profits, without any proportionate diminution elsewhere, and that it is precisely this immediate increase of national income, arising from the exchange of what is of less value in the country, for what is of more value, that furnishes both the power and will to employ more labour, and occasions the animated demand for labour, produce and capital, which is a striking and almost universal accompaniment of successful foreign commerce.

2.73

It is unquestionably true that wealth produces wants; but it is a still more important truth, that wants produce wealth. One of the greatest benefits which foreign commerce confers, and the reason why it has always appeared an almost necessary ingredient in the progress of wealth, is, its tendency to inspire new wants, to form new tastes, and to furnish fresh motives for industry. Even civilized and improved countries cannot afford to lose any of these motives.

2.74

To interfere generally with persons who are arrived at years of discretion, in the command of the main property which they possess, namely, their labour, would be an act of gross injustice; and the attempt to legislate directly in the teeth of one of the most general principles by which the business of society is carried on, namely, the principle of competition, must inevitably and necessarily fail.

2.75

The natural and permanent tendency of all extension of trade, both domestic and foreign, is to increase the exchangeable value of the whole produce.

2.76

In leaving the whole question of saving to the uninfluenced operation of individual interest and individual feelings, we shall best conform to that principle of political economy laid down by Adam Smith, which teaches us a general maxim, liable to very few exceptions, that the wealth of nations is best secured by allowing every person, as long as he adheres to the rules of justice, to pursue his own interest in his own way.

2.77

These quotations have not been applied severally in the course of this treatise, because I had proceeded to the page where they commence, before I saw Malthus; and therefore the memory of the reader must be chiefly taxed with their applications. The unforeseen coincidences are remarkable, and they might have been greatly extended by other quotations, had not a fear of prolixity forbidden it. The leading principles; that land only can yield permanent and sometimes great profits, in the United States especially; that manufacturing in the present state of the world must yield lower profits; that arbitrary depressions of wages are necessary to obtain these low profits; that the products of good land, well cultivated, will bestow spirit and energy both on domestick and foreign commerce; that an increase of foreign commodities will both augment and enhance the price of domestick productions; that the freer are exchanges the more industry is encouraged; that restrictions upon this freedom produce stagnations of labour and check the progress of wealth; that the wonderful prosperity of the United States for two centuries has been owing to foreign trade; that this consists in exchanges of what they did not want for what they did want; that wants produce wealth; that laws against competition must fail, or cannot produce good effects, as we have experienced; that an extension of trade increases the exchangeable value of produce; and that the great principle of political economy is to leave to individuals the right of pursuing their interest in their own way are all clearly asserted.

2.78

The fact, that the general diffusion of manufactures throughout the commercial world, both by home fabricks, and the competition of many nations, ought to be maturely considered, before we cripple agricultural profit, from a hope of reaping more profit by becoming adventurers in this overstocked market. A forbidding and permanent competition every where stares us in the face. If the competition in agricultural products was equally universal and permanent, yet the agricultural occupation would stand on the same ground with the manufacturing but with us it possesses the exclusive advantages arising from the cheapness, freshness, and goodness of our land; from always having a surplus to be enhanced by occasional fluctuations of seasons; and from often having the value of its products increased by foreign wars, against being engaged in which our situation shields us.

2.79

But a comparison between fostering agriculture or manufactures, does not exhibit the true question in debate. The policy we have been pursuing for some years, is that of surrendering our agricultural advantages, and driving our best customers into other markets, for the sake of fostering the unproductive capitalist employment; and it must be confessed that we have succeeded in both objects to a great extent. I am not satisfied with the usual division of productive and unproductive labour. It comprises in one class all bodily, and in the other, all mental labours; and seems eminently defective as to the latter class, for want of a discrimination between such mental labours as are good, and such as are bad. By confounding both under the general term, unproductive, they are artfully rested upon the same principles, however different in their effects. There may be more perspicuity by dividing labour, first, into physical and mental, and then dividing mental, into moral and immoral labour. Mental labours cannot be correctly called unproductive, because they are certainly productive of good and evil to a great extent. Government has been assigned to the class of unproductive labour, but it produces much good by frugality and justice, or much harm by extravagance and exclusive privileges. Philosophers, authors, lawyers, physicians, and tutors, are assigned to the same class; but they produce knowledge, justice, health, and instruction, and like governments, render compensations for the money they receive. Merchants excite and satisfy wants, encourage industry, and enrich nations. Exclusive privileges, monopolies, oppressions, and even thefts are also worked by mental labours; but instead of compensations, they render injuries for the money they obtain. The powers of physical labour suffice to produce a surplus of subsistence beyond its own necessities, and this surplus is apparently the provision made by the laws of nature, for the maintenance of the mental labourers, necessary to the existence of society. But a correspondence between natural and social laws, does not justify the establishment of that class of mental labourers, which produces social mischief. To distinguish true from fake political economy, we ought to distinguish beneficial from pernicious mental labours; and not comprise both under the common appellation, unproductive, both because their effects are different, and also because neither, strictly, deserve that character. But foreign economists have very ingeniously used the fact "that consumption bestows value on production," not only to justify the policy of sustaining by social institutions a class of useful mental labourers, but also to justify all the modes for transferring property or profit from useful labour, whether physical or moral, to useless and pernicious immoral labour, upon the ground, that it is beneficial in society that it should contain a class of consumers to bestow value on consumptions. The force of the argument applied to the bad class of mental labourers, is condensed in the assertion, that it would be thrifty for a man to give two dollars of his money to another, that this other might give him two dollars for a bushel of his wheat. The doctrine of purchasing consumers is adopted by the Committee; the object of which is to prove, that oppressive taxation and exclusive privileges will add to this class, and that it is of no consequence whether it is created perfa aut nefas, because it is a market for productions. It is a doctrine as applicable to highwaymen as to any other immoral capitalists; they are also consumers. But is it not better to get consumers by natural and voluntary modes, than by artificial and coercive modes; such as render compensations for their maintenance, than such as do not? If the individuals who compose a society, are left to arrange themselves into the two classes of physical and moral labourers, the supply of both will adjust itself to the demand; but if the supply of consumers is furnished by the Government, an overstock has never failed to appear highly oppressive to producers, who are forced by laws to maintain them. A sufficient stock of consumers will never be wanting, if men are left free, because the motive for acquiring wealth being to get into the class of consumers, or to get thereby moral accomplishments, it is a class into which all are pressing as fast as they can, and more likely to be sufficiently filled without the help of laws, than any other in society. The pasture for consumers will be filled naturally up to the food; but when people are turned into it by laws, without the passport of talents, industry is used like a common, and grazed as close as possible. Out of these observations arises a very important distinction as to capitalists. Those who acquire capitals by material productions or moral services, are the really useful capitalist class, as consumers, as giving value to productions, as encouraging industry, and as extending comforts. If they use their capitals in improving the face of the earth, for which there is always ample room, they are most eminently beneficial to mankind. And if they give them to their children, they rarely fail, in a generation or two, to breed consumers sufficient to keep a supply of consumption equal to production, without manufacturing them by arbitrary laws, and without subjecting the public to any expense; on the contrary, capitalists or consumers created by exclusive privileges or fraudulent laws of any kind, are, unexceptionably, drones with stings.

2.80

Highly valuable as manufactures undoubtedly are, yet all writers upon political economy agree that they are secondary, and unite in allowing the first place to agriculture. Capital is essential to both occupations. If they were of equal value, nothing would be gained by transferring the capital of either to the other, and much would be lost by transferring the capital of either to the class of capitalists I have just attempted to describe. But if mechanicks are reduced to a state of vassalage, and both their profits and the profits of farmers are transferred to such a class of capitalists, according to our existing protecting-duty and factory policy, we have already obtained an enormous overstock of consumers of the profits of labour, as always happens when this family is created by laws, and not by free industry and fair social intercourse; and we are feeling that it grazes too close. Taxes are not burdens but blessings to this whole family, because they contribute less than they receive, and an increase of taxation is a new acquisition to them. Is it this fact which has influenced the United States to submit to the policy of a capitalist aristocracy? Neither bankers, nor pensioners, nor lenders to the public, nor receivers of factory bounties, pay any thing to the treasury as such, for their personal consumption would exist if they were neither bankers, nor pensioners, nor lenders, nor receivers, of factory bounties. As capital is created by profit, and as the useful occupations cannot flourish without capital, each transfer of their profits, whether to the government by unnecessary taxation, or to exclusive privileges, diminishes their ability to promote consumption, and the national prosperity; and establishes a domestick commerce by which the majority pays all, and receives nothing, and the minority receives all, and pays nothing. The rapidity with which such a domestick commerce impoverishes one party and enriches the other, is demonstrated by the present situation of the capitalists and the rest of the community. This, and not foreign commercial restrictions, is the cause of the public distress. Though prices have fallen, commerce, if undisturbed by domestick restrictions, would soon establish an equilibrium in the commercial world, leaving a profit less as efficacious in fostering individual internal improvements, as one nominally greater; if this inferiour profit is not taken away by the really unproductive families; but if these families continue to extract from the productive classes of both material and moral comforts, the same sum of money as when profits were higher, they are deprived of the only means by which they can advance the national prosperity, and as the classes producing neither material nor moral benefits, do not advance it at all, indications, of national poverty and decline, are the unavoidable consequence. This observation is sustained by the distinction between the capitalists and mechanicks, and between the capitalists and agriculturists, and is equally applicable to both the productive classes. Agriculture cannot be destroyed (the question as skilfully stated by the Committee) but it cannot flourish, by being deprived of its profits or capital. If profit is necessary (as the Committee insist) to make capitalists flourish, it must also be necessary to make farmers and mechanicks flourish.

2.81

But we are again met by the English example. Both agriculture and manufactures flourish in that country, and therefore it is inferred, that, by adopting the English policy, they may both be made to do so here. If the physical and moral circumstances of the two countries were the same, the argument would prove the practicability of the imitation proposed, and the inquiry would then turn upon its justice, and whether it was calculated to increase or diminish the happiness of mankind. But because a system is practicable in England, it does not follow that it is practicable here. That which is allowable for the ends of sustaining a monarchy or an aristocracy, may be tyrannical in a republic. Her populousness, the scarcity of land, and the difficulty of subsistence, are remorseless goads for driving industry to its utmost stretch, solely applied by landlords and capitalists to tenants and mechanicks, because they have been inured to them by the help of a standing army, and cannot flee from their inflictions. But here neither of these goads exist; and, instead of these resources for stimulating industry, we can only excite her by leaving her profits in her own hands, and suffering her spontaneously to create capitals for improvement, consumption, and reproduction. Whether this end is obtained by free-will or legal coercion, the effect in advancing national prosperity, might in some degree be the same; but the attempt here to obtain it by the impracticable legal coercive mode, has paralyzed the practicable free will mode, without deriving any advantage from its substitute, consisting of a monopoly by landlords, capitalists, officers of government, and pensioners, of nearly all the profits made by tenants and mechanicks; and of a considerable portion of those derived from extraordinary mental talents. Our land-owners being the tenants of their own lands, far from having an interest to join in this conspiracy against productive labour, are its chief victims. An imitation of the English policy for transferring property from productive to unproductive classes, has taken away the profits and capital able to excite free industry, without being able to make any amends for its discouragement, because it has not the English scourges for lashing enslaved industry up to its utmost exertion.

2.82

The English coercive system being impracticable in this country, a substitute for it became necessary, which is attempted to be found by cutting commerce in two, for the end of establishing a compulsory mode of transferring property—oiling the wound with two promises; one, that the way to keep it alive is to kill one half of the other, that the reserved half will bring us more money than the whole. Suppose that these promises should bring us in ship loads of money instead of ballast. Whilst the depreciation produced by this expected influx of money, should travel faster than taxation and exclusive privileges, less property would be transferred; but the managers of the transferring policy, would very soon take care to make themselves amends for it, and when the ebb happened (for money cannot be converted into an inland sea without tides) they would find their incomes so much improved by its appreciation, that they would not love them less, nor be more willing to diminish them. We have had some experience of the effects of this money-importing project, supposing it should succeed, in a moneymaking project, which did succeed. A plenty of currency induced legislative bodies to increase their wages; governments to increase their expenses, extend their patronage, and bestow pensions; and capitalists to increase protecting duties; and has taught us, by woful experience, the effects of a redundancy of money. It is used by the property-transferring policy to augment its incomes, and ultimately to punish the credulity which believes that a plethora of money will advance the wealth or happiness of majorities. Our protecting-duty capitalists have had their appetites so whetted by the augmentation of their bounties arising from the appreciation of money, that they are craving still more. The English system for transferring property, works by compulsion; ours by promises; but their effects are the same; they both transfer property from useful and productive, to immoral and unproductive occupations. Banking promised to foster commerce, and make us rich by a plenty of money—the money came, and made us poor. Protecting duties promised to bring us plenty of money by half-killing commerce, and patching a domestick monopoly to the other half—they have brought distress. What good could the promise of a second plethora do us, without an importing commerce? Both these promises have been substitutes for the English coercive mode of transferring property and they operate upon farmers in this country, exactly as rents do in England upon tenants, except that they transfer the profits of the cultivators of land to pecuniary capitalists, instead of landlords. But the difference between the land-owners in the two countries is greatly in favour of the English. There they take care to benefit themselves by the property-transferring policy, make corn laws to increase their rents by enhancing the price of bread, and chiefly confine the factory capitalists to what they can make by their monopoly of mechanicks, and exporting their commodities. But here the factory capitalists have managed far more skilfully, by transferring to themselves the profits of agriculture in addition to those they may obtain from a monopoly of mechanicks; and the land-owners have discovered nothing of the dexterity, or self-defense, exhibited by the English land-owners. Hence the agricultural employment has become so unprofitable, that Hope, though an enthusiast, shrinks from it as forlorn, and the capitalists, as their object is profit, flee from it as desperate.

2.83

To this cause, in a great degree, must be ascribed the chief indication, according to Malthus, of the national decline which we regret. The translation of the profits of agriculture, which it ought to retain to prevent this decline, to the hands of unproductive capitalists, is effected by one of the plainest principles of political economy. Scarcity enhances, and plenty diminishes, prices. The scarcity of manufactures, produced by the protecting-duty policy, must of course enhance their prices; and the plenty of agricultural products, produced by shutting them out from foreign markets and prohibiting to them sundry foreign exchanges, must also diminish the prices of these products; and thus two screws are at work to diminish agricultural profit and capital. A legal, has the same effect as a natural, scarcity, and there is no difference to the sufferer, whether the loss inflicted on him proceeds from one or the other mode of effecting it. If a famine or a monopoly of grain, produces the same degree of scarcity, and the same enhancement of price, the purchaser would sustain the same deduction by either from his capital or the profits of his labour. What would the purchaser of grain think of a proposal to keep up an artificial famine of it for an indefinite period to enrich its monopolies, because they promised to make it cheap at some future day? That which a purchaser of manufactures ought to think of our policy for creating an artificial famines of these articles, almost as necessary as grain, because they also promise a future cheapness. Is it difficult to discern that artificial and natural famines operate in the same way, and that neither can be blessings to those who pay the enhanced prices, which both produce?

2.84

That may be true, the Committee might reply, but we propose to bring about a famine of agricultural products to increase their prices, and an abundance of manufactures to diminish theirs. These two cards are all they propose to deal out, and they suppose that those who hold them, will play very lovingly into each other's hands. The Committee do not observe that they calculate in the two cases upon contradictory principles. If the consequence of making manufactures scarce and dear, should terminate in their plenty and cheapness, an encouragement to agriculture which would increase its products, would not have the effect of increasing their prices or value. It is therefore a fallacy to suppose that agriculture can ever be compensated by future high prices, for those now extorted from it by capitalists, because if it derives encouragement from the protecting-duty project, that encouragement would have the same effect in diminishing its prices, as it is supposed it will have in the encouragement of manufactures. The modes resorted to for the encouragement of the two occupations are exactly opposed. One is to be encouraged by increasing prices, the other by diminishing them. If both should have the effect of producing plenty, cheapness ensues in both cases, and a compensation to agriculture for its temporary disbursements can never happen. In fact, however, the plenty and cheapness of land must, for many centuries, cause a plenty of agricultural products; and, as the principles of commerce will for ever annex cheapness to plenty, agriculture can derive no augmentation of its prices from the bounties it is now paying to capitalists. The project is therefore only a temporary transfer of property, which proposes, by giving high prices to manufactures and low prices to agricultural products, to produce a plenty of both, and then to leave this plenty to regulate future prices by the commercial principles of free exchanges, without even disclosing a possibility of reimbursement.

2.85

The spice-burning policy of the Dutch, if it ever existed, has been quoted to prove the wisdom of the destroying portion of the protecting-duty policy; and the manufacturing policy of England is relied upon, to prove the wisdom of its creating portion. Protecting duties will diminish the products of agriculture, and enhance their price by their scarcity; and they will increase manufactures, so as to make them cheap by plenty, to bear exportation. Now, it seems to me that by increasing the exportable surplus of agricultural products, we shall with more certainty increase their prices, than by diminishing them, provided we invite commodities from all parts of the world to exchange for them. The greater this surplus, the more it will be depended upon by foreigners, and this dependence will extend competition. If the surplus is small, its influence is trifling, and it may be abandoned by foreigners without difficulty. We have suffered by no error more severely, than by that of assigning too great an importance to our surplus of bread stuff, which has induced us to imagine that we could starve nations, and tempted us to contract markets which ought to have been extended, for the purpose of coercing them by a necessity which we supposed would be imperative, but which was hardly felt even as an inconvenience. Our soils and climates have not invested us with any article resembling spices, and as all our commodities meet with competition, plenty and cheapness, and not scarcity and dearness, must be our reliance for a profitable commerce. The Chinese tea-policy would be better for us, than the Dutch spice-burning policy. Instead of diminishing the quantity of this agricultural product, they increase it; and retain the trade by its plenty. If they should produce a scarcity by burning or by any other artifice, and enhance the price, they would induce other nations to cultivate it, and drive their customers to other markets, as we have done in the case of bread stuffs. All our agricultural productions are rivalled, and the competition can only be met by industry, plenty, cheapness, and a frugal government. Thus only can we avail ourselves of the plainest principles of political economy. Plenty begets cheapness, cheapness invites customers, customers produce competition, and competition enhances prices. Plenty is also ready for emergencies or casualties, caused by fluctuations of seasons or foreign wars, so frequently occurring in some country or other; and would undoubtedly, in union with a commerce freed from our own restrictions, constitute the best basis for political economy, of which the United States are susceptible. By diminishing agricultural products, to increase manufactures, we only surrender our best commodities for the sake of trying others, which others must be subject to the same commercial principles; and it is easier for us to rival other nations in agricultural than in mechanical commodities. The latter could only force their way by superior plenty and cheapness, and could never derive any assistance from an abundance of fresh land, foreign wars, or bad seasons, in other countries. As success in both cases depends on the same principles, economical, political, or commercial, we have only to compare the probabilities with each other, to determine our choice.

2.86

The English precedent, relied upon by the Committee to justify their project, defeats it. Manufactures constitute the occupation most able to produce exportable commodities, in their circumstances; agriculture is that most able to produce exportable commodities in ours. The English, far from endeavoring to diminish the mechanical productions, to enhance their price by a scarcity, endeavour to increase them, for the purposes of extending their commerce by plenty, and meeting competition with cheapness. This plenty and cheapness, by multiplying customers, procures for their manufactures more markets and better prices than could otherwise be obtained. Such is the English political economy as to their kind of exportable commodities. That of our restrictive policy, advocated by the Committee, is to burden agricultural products, constituting our species of exportable commodities, with bounties to factory capitalists; to diminish their quantity to cut off their markets; and to disable them from meeting competition by plenty and cheapness; so as to extend our commerce and create new customers, as the best mode of keeping up their value. And it is very remarkable that the object of this project deduced from transitory circumstances, is to terminate in the very same political economy subservient to the laws of commerce, applicable to agricultural exportable commodities, namely, that of entering into a manufacturing competition with all the world, founded upon plenty and cheapness. The principles which must govern our competition, either in agricultural or manufactured exportable commodities, with commercial nations, being the same, the question is reduced to the plain computation, as to which class our means for success are most extensive. Had the English destroyed their manufacturing competition with the rest of the world, in order to create an agricultural competition, the precedent would have been exactly in favour of the political and commercial economy, advocated by the Committee; as they pursued a different policy, it is exactly against them.

2.87

But whether the prices of agricultural products are high or low, it equally furnishes arguments for exclusive privileges and unproductive classes. If they are high, farmers are able to pay high taxes and bounties to self-enriching projects; if they are low, it is for want of more of these projects to raise them. But political economists have never been able to discover any mode for securing high prices, or even a measure by which they can be regulated. Both money and corn are imperfect measures. It has been impossible to count the circumstances, or unravel the complexity, affecting the commercial intercourse among mankind. Climates, soils, population, wars, industry, fashions, discoveries, stratagems, and the whole mass of human passions, enter into the computation. Yet the Committee propose to govern this ungovernable complexity by local laws, and promise to farmers a compensation dependent upon a hopeless success. They have discovered that the existing low prices of agricultural products proceeds from the want of a sufficient number of endowed factory capitalists. But a fall in these prices is common to all commercial nations. England has experienced it. Was her decline of agricultural prices also occasioned by a want of such factories? If not, they are no remedy against it. Land has also fallen in price. Has this also been occasioned by the want of factories drawing bounties from land? Had prices been left to the umpirage of commerce and self interest (arbitrators so powerful as to prevent the fraudulent attempts to regulate prices by local laws, from being quite ruinous to nations and individuals, though they have uniformly suffered severely from them) we should have avoided the evils which these attempts never fail to produce. To conciliate the farmers towards their attempt to regulate prices, the Committee tell them that it will violate justice in their favour, by having the effect both of raising the prices of their products, and diminishing those of manufactures; but ought not a good government to protect the factory owners against their fatuitous ardour to obtain this double misfortune? The Committee have celebrated the acuteness of the Americans in discerning their interest, but instead of leaving this acuteness to take care of itself, they propose to render it inoperative, for the sake of showing their own acuteness in surmounting the impossibility of regulating prices. They will not suffer our "eagle-eyed" acuteness to discern which employment is the best, agriculture or manufacturing, whilst they leave it a competence to discover what species of manufacturing will be most profitable, trusting that the capitalists will pounce upon the richest prey, and not forget their interest in their eagerness. But the agricultural eagles are supposed to be too dim-sighted to see their interest. Local laws have never been able to regulate domestick prices, even by the aid of local currencies; how then can they regulate both domestick and foreign prices, by the universal medium of exchanges?

2.88

To subvert the unalterable laws of commerce, upon which political economy is founded, the Committee have selected several particular articles, the prices of which they say are reduced by the protecting-duty policy such as manufactured cottons. The prices of these they assert are below what they could be imported at. If so, it is obvious that the reduction is owing, not to this policy, but to the primary and invariable cause of cheapness, namely, our plenty of the raw material. Cheapness being the natural consequence of plenty, could not have been caused by laws, which neither increased nor diminished the plenty of the material which caused the cheapness. Thus, our plenty of wood enables us to build ships cheaper than some nations can, and our plenty of wheat and tobacco, enables us to sell those articles in a manufactured form, cheaper also than they can be imported. The cheapness in all these cases results from the local plenty of the raw materials, and can by no means be ascribed to cunning laws. To impair the value of the surpluses remaining after supplying our own factories, by restricting the freedom of exchanges, and by prohibiting the acquisition on the best attainable terms of things which we want, in exchange for those surpluses which we do not want, causes a useless loss to the agriculturist, and a general loss to the nation. This exhibition of particular articles therefore, to prove the goodness of the whole cargo of the protecting policy, is that of a shop-keeper who puffs off two or three articles in his store; but credulity only believes that these two or three articles suffice to establish the goodness and cheapness of his whole stock. With people of understanding the artifice rather excites a suspicion that the rest are bad and dear. Of the same complexion is the artifice of selecting and retailing in debate a few articles, as a proof that an immense system, compounded of innumerable items, pecuniary and political, is good throughout. No project was ever so poor and dark, as to afford no glittering specks—no glimmering delusions. As the isinglass sometimes found in gypsum does not constitute its character, so a few glossy particles sprinkled in a widely-operating system, are no proofs that it will advance the national prosperity but when these particles are stolen from the principle of plenty and cheapness, as in the cases of cotton, wheat, and tobacco, it is on the contrary a proof that the system does not even contain any glittering specks at all, but is opaque throughout.

2.89

Several of these retail cases are urged as if each was a new argument, though they all admit of the same answer. They seem however to be comprised in the assertions, "that it now takes as much wheat to buy one yard of linen, as would formerly buy four, and that foreign manufacturers and domestick importers will take nothing but our money for their goods." The Committee might have added, that in the spring of 1821, it took as much wheat to buy a yard of domestick cotton shirting, as would at one time have bought three or even four also. Such fortuitous occurrences are frequently arrayed against unchangeable principles, and if they could be thus destroyed, mankind would soon have none left to steer by. If these assertions are true, what further coercion can be necessary to drive people from the plough into the loom? Is not the price of shirting sufficiently high without enhancing it to enrich capitalists? If money only will be received for foreign goods, must not the trade end soon enough of itself, without hastening its death by restrictions, and infallibly effect one object of the protecting-duty policy—that of compelling us to manufacture. We have not exportable money enough to pay for one year's importation, and when our money is out importations must cease, if our agricultural products will not be received in payment; and when importations cease, manufactures will be in sufficient demand. But the fact is, that as commerce cannot exist without exchanges, so no nations which trade with us, will conceive the contrary and though they will get our commodities as cheap as they can, yet this very cheapness will bring to us frequent opportunities of retaliation.

2.90

To get over so plain an argument, and to provide against inferences from their own assertion, the Committee suggest that we are indebted to some other markets, to enable us to buy English manufactures with money, and then they endeavour to prove that a circuitous commerce, by which we make one nation pay for what we buy from another, is of no importance, by presenting us with an Utopian picture as the model of their commercial and political economy. A nation, they say, "differs only from a village in extent," and that "the model of a society composed of an hundred men, following an hundred different occupations, dealing with each other," is a good commercial example for a great nation. This village policy overlooks all differences of climates and soils, and seems only designed for one of those fortunate islands when found, which contains every thing which man can want; but being apparently antediluvian, or at least aboriginal, the Committee have thought proper to defend it by an encomium on household manufactures; observing also, that the greatest means of exchange, is said to be the most prosperous situation. This confusion of ideas is not to be reconciled. Why should factory owners receive bounties from farmers, if household manufactures are the best security for the prosperity of farmers? Why should the means of exchange be diminished, if the greatest means of exchange constitute the most prosperous situation? How can a mighty nation be compressed, morally speaking, into an insignificant village, if an insignificant village cannot be dilated into a great nation? But the merchant's ledger is the Pythian oracle ready to supply the Committee with the responses they suggest, in order to demonstrate that the policy of promoting exchanges, so good between one hundred villagers, will be bad between one hundred nations, or at least much worse than household manufactures. That manufactures promote exchanges; that the greatest means of exchanges constitutes the most prosperous situation; that household manufactures to diminish exchanges are still better, and that the means of exchange should be narrowed and compressed in a great nation until it resembles a village of an hundred men, are positions making, when combined, a very good oracle. It is true, that farmers, aided by commerce and exchanges, have frequently thrived by the additional assistance of household manufactures, but in no instance that I know of have they been able to thrive by household manufactures, without the aid of these two auxiliaries. These are the means by which industrious farmers certainly gain a considerable balance of trade from other countries for their own, by supplying many of their wants within themselves; and by prohibiting foreign commerce and free exchanges, these household manufactures have no longer the important effect of causing a multitude of surpluses beyond expense, silently to unite in procuring the envied balance of trade, and promoting to a great extent, the national prosperity. The experience of five or six revolutions between the liberty of free exchanges, and the coercions, accidental or legal, creating a necessity for household manufactures, have convinced me of their inefficacy for producing wealth, when uncombined with foreign commerce. We are not obliged to elect between foreign manufactures and household manufactures. Let all be free to individual preference; let our eagle-eyed people choose and abstain for themselves. They generally strive to make some surplus annually, and know how to effect it better than the government can inform them. Their surpluses constitute the only solid national profit, and therefore whatever defeats their efforts causes a national misfortune. With this freedom of commerce the ledgers of the farmers will be hard enough for the ledgers of the merchants. So far as my experience has extended in Virginia, I believe that a balance is always due by the mercantile to the agricultural class; and that the latter class suffer more from the bankruptcies of the former, than the former class does from those of the latter.

2.91

But however this may be, even our household manufactures, eulogized to curry favour with the agriculturists, will be cut up by the policy of excises; proposed as a substitute for the loss of duties. They must operate entirely in favour of the factory monopoly, and deprive the agriculturalists and many other people, of the comforting household manufacturing resource, against fortuitous misfortunes, and premeditated legal contrivances to foster an oppressive aristocracy. Excises are quite convenient to factory, and excessively teasing to household, manufactures. An excise is reimbursed to the factory owners by the consumers, whereas it falls upon household manufactures as a direct tax, without any reimbursement. In England, an excise is a bonum to capitalists, and a malum to farmers. In the United States, it will be particularly oppressive upon the whole inland district; the few villages excepted where factories are established; and equivalent to a tax upon the land itself, imposed by the acre, and not according to its value. Under the excise system of raising a revenue, a man who cultivates poor land, pays as much for the same article taxed, as he who cultivates rich: it is therefore a tax by the acre, if the article taxed is produced by land. If an excise is laid upon corn, wheat, rye, hops, and many other articles, it must be by a measure common to every quarter of the Union, because the constitution requires uniformity and this uniformity would compel the raiser of corn, and most other agricultural articles, to pay twice as much tax, in those districts where a barrel of corn is worth only one dollar, as in those where it is worth two. Such would be also the case in an excise upon many other domestick manufactures or products. The tax upon them when they are consumed in the family, is completely a direct one, except that it cannot be regulated by the rules applicable to a land tax, and must therefore be excessively unequal, locally and individually. If factories are dispersed throughout the inland district, it will not alter these effects, because excises must either extend to a great number of household manufactures, or these factories could not furnish objects for an excise to act upon. If farmers consume the factory manufactures, they must pay the excises laid upon them, which would be equivalent to the payment of the same taxes upon household manufactures. If they do not consume them, but fly from these excises to household manufactures, the excises must follow them, or more unavoidable modes of taxation must be resorted to. Either way the inland districts will be the chief sufferers. Direct taxes upon land are paid by the census of a State, and not by the profitableness of geographical situation; whereas the mode of raising revenue by duties, is apportioned by the relative ability to pay between maritime and inland districts. Nor is there any injustice in this, because, if household and factory manufactures were both free, the maritime districts can avail themselves of either, or do better. Taxes on foreign commodities, such especially as are most costly, when their consumption is not prohibited, fall on opulent cities or wealthy individuals; but excises on home manufactures, fall chiefly on the labouring classes. Duties for revenue only, are subject to a wholesome limitation, because, if they are pushed too far, their end is defeated. But excises on domestick necessaries, seconded by commercial restrictions, may be made exorbitant; whilst duties to a great extent are the voluntary contributions of wealth and luxury, if they are not excluded from gratifications by unjust and impolitic restrictions. But these arguments, it must be confessed, admit of an answer; the protecting-duty policy will make the whole of the United States an inland country, and then excises and other direct taxes will fall with equal severity upon every portion of it, as geographical advantages will no longer exist.

2.92

Household manufactures are complimented by the Committee, to insinuate that their encouragement was one design of the protecting-duty policy but the very reverse is intended and must happen, or their eulogy upon factory manufactures and excises cannot be realized. Manufactures made for sale only, receive the bounties bestowed by protecting duties, and those made and consumed in the family do not receive a cent of it. Could the amounts of household and factory manufactures be ascertained, it would probably appear, that the former exceed the latter an hundred fold; at least the difference would be very considerable. And yet it is proposed to inflict an excise upon household manufactures, to foster the factory manufacturers, though of so much less value. Does not this demonstrate, that the prosperity of capitalists, and not of manufactures, is the object in contemplation? The more valuable household manufactures are, as an appendage to agriculture, the deeper will agriculture be wounded by transferring taxation from duties to excises.

2.93

The Committee have repeatedly urged the effects of the late war, and the war duties, as proofs that it will be wise to nurture factories by prohibitions upon commerce, because, during that period they flourished exceedingly, by deriving excessive prices from a casual prohibition, producing a temporary famine or scarcity of manufactures; by which a few capitalists who made them for sale, and not those who made them for family consumption, were enriched. This accidental discovery has suggested the idea of a permanent famine or scarcity, as a substitute for the war which has ceased; and equally beneficial to capitalists. The new war ought to be estimated by others as well as by the capitalists, according to their experience. Those who gained wealth by the old war, undoubtedly loved it, but those who only got poverty from it, must as certainly be glad that it is over. It is easy for those who felt the calamities of the old war, to determine whether their revival by a new war against their property, ought to be coveted. War is the casualty which most extensively transfers property, and by that effect most sorely oppresses nations. It invariably generates a class of men, who wish for its continuance, however injurious it is to the people generally. The very plain language put into the mouths of the capitalists by the Committee, was never surpassed, nor perhaps equalled in point of candour. "We were wonderfully enriched by a temporary manufacturing war monopoly, therefore secure to us the same income by a permanent legal monopoly." Commissaries and contractors might petition Congress for bounties on the same ground. The claim of the gallant officers, soldiers, and seamen who fought our battles, is ten-fold stronger. They lost more blood, and got less money than the capitalists. Which of these two classes, if we were obliged to keep one, ought to have been disbanded? The Committee state so very fairly, the nature of the war which has been substituted for that we were glad to get rid of, that it cannot even be called a war in disguise. This new war is to be carried on by foreign and native capitalists. The foreign combatants for capital or wealth, receive great bounties or high pay from their governments; therefore, say the Committee, we ought to give great bounties, or high pay to our domestick combatants, for capital or wealth, "or they will not have fair play." As the victory consists in getting most money from the people, whether the play is fair or foul, it will undoubtedly be a very pleasant war to the two armies of capitalists. Instead of losing blood, they are to get money. These foreign and domestick armies are perpetually exclaiming to their governments, "more pay, more pay!" As pay only can win the victory, we must lose it, say our capitalists, unless our government augments our pay as fast, or faster, than the British do that of their army of capitalists. Can there be a finer war for the two armies? The effort is, which government can give its army most wages, or open most purses to their chaste and patriotic fingers. And this kind of war is called by the Committee, "protection to agriculture, which the people have a right to ask of the government." Let us exhibit the nature of this protection in figures. The English give a bounty or wages to their capitalist army of more than one hundred millions of dollars annually, therefore this species of protection requires our government to give as much to our capitalist army. If they increase their bounty, we must increase ours. The number of people in England and the United States is nearly equal, therefore their bounties to the respective capitalist armies, must be nearly equal also. But who pays these merry pipers—the people or their governments? Let us shrink from the idea, that our government can protect or enrich us, by transferring our property to capitalists, with a siren song. When nations depend on themselves for protection and wealth, it is a proof that they are free; and when governments claim a power to give them either, it is a proof that they are not free. They become the slaves of an army of soldiers, or an army of capitalists, commanded by the government. But what is the protection afforded by the protecting-duty policy? Simply to transfer some millions from the people to capitalists, for which, if not transferred, they would have received an equivalent from foreign nations. The reason alleged for this protection of our property by transferring it to capitalists, is, that the bounties paid by foreign governments to their capitalists, enable them to sell manufactures cheap to us; if so, we get the bounty. In this view, it would be beneficial to us that England should increase her bounties, until their capitalists could sell us manufactures at half their value, or even give them to us. But the Committee, with great magnanimity (and this seems to me the best argument in favour of their policy) propose fairly to reciprocate the kindness by giving bounties to our capitalists, that they may also sell cheap manufactures to foreign nations. No, says this policy, the domestick bounties are given to enable our domestick capitalists to sell cheap to ourselves, and also to prevent foreign cheapness from acquiring a monopoly among us.

2.94

This argument deserves some attention, in order to detect some share of plausibility. We must recollect the existing circumstances of the manufacturing world to estimate its force, because, though it might have been sound under some circumstances, it may be weak under others. It might have been wise to purchase arts, sciences, philosophers, and artisans, by temporary rewards, when a nation was without them; and unwise to convert them into permanent exclusive privileges or a pecuniary aristocracy, after they were acquired. By suppressing this distinction, a superficial force is bestowed on the argument which it does not deserve. A knowledge of commerce, arts, and sciences, is now so generally diffused among a certain number of nations, that ignorance does not subject any one of them to the necessity of obtaining information at the expense of great sacrifices, either political or pecuniary; nor is any member of this informed catalogue of nations so exclusively wise or skilful, as to be able to establish a monopoly upon another. The United States undoubtedly belong to the commercial, manufacturing, and enlightened catalogue of nations; and therefore they are neither under the necessity of purchasing any branch of knowledge, nor exposed to the danger of being monopolized on account of their ignorance. With respect to the mechanical arts, they are admitted by the protecting-duty project to be so well informed, as to be even able to expel foreign competition; and the art of agriculture is supposed to be so far advanced, as to enable us to exercise a coercion on our part over foreign nations, by withholding from them its products.

2.95

Under these circumstances, it is said, that sound policy dictates to us the establishment of a manufacturing monopoly at home, lest we should be exposed to a manufacturing monopoly from abroad, to be obtained in future by bounties giving us cheap manufactures at present. Much has been said by the Committee to strip the subject of the two ugly words "bounty and monopoly," respecting our native capitalists or factories, whilst they apply them to foreign capitalists or factories. They contend that foreign monopolies are created by bounties, enabling factory owners to undersell competitors at present, and to obtain an exclusive market in future. They also contend that domestick bounties ought to be given to domestick capitalists or factories by protecting-duties, that they may also undersell competitors at present. But they deny that the domestick pensioned factories will obtain an exclusive market or monopoly, by the very same means which they suppose will bestow it on foreign pensioned factories. Yet it is evident that they will be more able to do so, assisted by law, and unexposed to any competition except among themselves, than any foreign nation without legal assistance, and kept in check by all other foreign nations. However this may be, it is evident that success in either the foreign or domestick project must produce the same consequences to consumers. If one case constitutes both a bounty and a monopoly, the other must also constitute them. The cases being the same, the terms applicable to one are applicable to the other; and a disavowal of this mutual application, is merely an endeavour to alter the nature of things, by altering the words used for defining them. The true question is, whether the fear of an English monopoly should drive us into a domestick monopoly. The Indians, towards the north-west, have, it is said, an ingenious mode of taking deer: by frightful but harmless appearances they drive them into real toils and certain destruction. Our mechanical skill, and the competition between foreign nations, will secure us against the ugly English monopoly, and also save us from the destructive toils of a domestick monopoly and permanent excises, if laws did not force us into them.

2.96

Let us compare the evils resulting from foreign and domestick restrictions, bounties, and monopolies, to discern which are the worst; for both are undoubtedly bad. By foreign bounties, consumers are enabled, for a period, often a long one, to buy cheaper; by domestick they are compelled to buy dearer. Foreign monopoly, the design of foreign bounties, is certainly diminished or defeated by the competition of independent nations; by our power of transferring our commerce from a nation attempting it, to those nations which do not; and by the progress of our internal mechanical skill. Domestick monopoly, the design also of domestick bounties, cannot be defeated by the competition of all manufacturing foreign nations, because this competition is expelled by protecting-duties; nor by a power of transferring our dealings from the monopoly to free exchanges, wherever to be found, because this power is taken from us by law; nor by our internal mechanical skill, because that skill is to be monopolized by the capitalists, who will very easily effect it, by the help of a general excise. Our mechanical skill, if not monopolized, would itself be a full match for foreign competitions, when aided by freights, revenue duties, and the cheapness of materials; and to force it into undertakings where these advantages will not suffice, can only produce a loss or a fraud. Foreign bounties and monopolies cannot create a moneyed aristocracy here, able and willing to corrupt the principles of our government—domestick can. Foreign regulations of commerce cannot be uniform among all nations, and however restrictive, their dissimilarity will always afford us a better market, than can possibly be afforded by a single capitalist combination at home. But the Committee contend that all these foreign nations will receive money only, and that the domestick monopoly will receive our agricultural products. This is the great argument by which the protecting-duty policy is defended, and if it is unfounded in fact, the error of that policy becomes apparent.

2.97

Where are our capitalists to get money to purchase the flour, grain, cotton, tobacco, fish, and all our exportable articles, exclusive of those they manufacture? The idea of their being a competent, or even a tolerable market for all these articles, is either a very high computation of their present wealth, or an appalling intimation of that which they expect to get by their monopoly. If they have not the money with which to buy all these exportable articles, it is obvious that their monopoly will not yield us money; if they have, it is as obvious that they have no occasion for the monopoly. It is possible for us to get money of those that have it, for our commodities, but not from those who have it not. The fact is, that these capitalists will themselves be extractors of money from the people, and mere compilers of unproductive capital, because they will require but a very inconsiderable portion of agricultural products, for manufacturing or consumption, and beyond that portion must be paid in money only for their wares. Thus, the trade to be introduced for the sake of enriching the capitalists, is coerced by the protecting-duty policy, into the following course: The surplus of all our commodities, beyond the inconsiderable portion of them which the factories can consume, is to be exported to bring back money only, and this money is to be paid to the capitalists for the surplus of their wares, exceeding the value of their inconsiderable consumptions. Its effects are, first, to diminish excessively the value of agricultural products, by depriving them of the enhancement produced by a freedom of exchanging them for foreign commodities; by doubling the price of factory commodities, or increasing it far beyond what the foreign would cost under a freedom of exchange; and by doubling the expense of freight upon our exported commodities, for want of the return cargoes which would have divided it. Secondly, to increase enormously capitals in a few hands, by a constant current of the money thus to be procured, into the pockets of capitalists, and cause pecuniary accumulations which will not be employed in reproduction, because they will not be invested in agricultural improvements, since profit from them will, by the system, be made more and more hopeless. Thirdly, to continue the destruction of the impost mode of obtaining revenue, so as to enforce a resort to more oppressive modes of taxation, and to loans, which will be successfully advocated by the great moneyed influence thus to be created, for the two purposes of increasing the profit of its monopoly, and finding employment for the capital it brings, by lending it to the government. Fourthly, of increasing the expenses of government by new and internal taxes, and by the facility with which loans will be obtained from the capitalists. And lastly, by throwing this whole accumulation of expenses on all other occupations which have least money, and absolving the capitalist occupation which has most money, from bearing any share of them.

2.98

Such is the course of the proposed trade, supposing that foreign nations both can and will give us their money for our commodities, though they are said to be giving bounties to their capitalists, in order to come at our money, by enabling them to sell cheaply to us. If the money they thus get of us, does not exceed in amount the bounties they pay to get it, the speculation is so absurd as not even to deserve the lowest of all compliments; that of being fallacious. The same compliment is due to our speculation for getting their money, if we fail to get enough to reimburse us for the money we pay to our capitalists to come at it. But as it is impossible that the greediness of all commercial nations should be levelled at our little stock of specie, and not at our great stock of commodities, our commercial policy would stand upon safer ground, if it was modeled upon a supposition of the latter greediness, than modeled as it is upon a supposition of the former. In that case, there would be no occasion for a domestick sect of capitalists, to save our specie, and subject our commodities to depreciation. Let us, say the Committee, turn the tables upon these foreign speculators, and aim only at their specie, as they aim at ours. If their speculation will diminish the value of their exportable commodities, by depriving them of their exchangeable value in our markets, the same speculation will, in the same way, diminish the value of our exportable commodities. In this project for overturning the only principle by which commerce can subsist or be useful, the Committee propose, first, to be as cunning as foreign nations, by refusing to admit their commodities, lest they should take away our money; and then to outwit them, by sending our commodities to take away theirs; never recollecting, that as we have discovered this profound stratagem of theirs, they may possibly discover it when turned upon themselves. Should they do so, and imitate the Committee, as the Committee propose to imitate them, our commercial surgery will be like that of a British soldier captured by the Indians, who induced them to cut off his head, as the means of procuring his liberty. The project is internally inconsistent, by supposing that commercial nations will combine to get our money, and reject our products which they want, and can use; but that our domestick factory owners will not combine to get our money, but will buy our products which they neither want nor can use, except to an inconsiderable extent; so that the mass of these products must remain on the same ground, as if the domestick monopoly had never existed. We cannot turn the tables on these factories, by forcing them to give us money; on the contrary, their owners are empowered by law to force us to give them money. Our exportable commodities, which serve without pay, will be better soldiers abroad, in carrying on a commercial war with dissimilar foreign restrictions, if they retain a freedom of exchange, than an army of capitalists at home, created and paid for carrying on the same war. The surplus of these is the whole fund for acquiring of foreign nations what we want, but the surplus of capitalists which we have created, acquires nothing. Commerce subsists by exchanges of indigenous for foreign surpluses, and though our surpluses of commodities may sell low, our surplus of capitalists will sell for nothing. By whatever regulation the exchange of our surplus for a foreign surplus is obstructed, national wealth is diminished, because it consists of things which we want, and not of things which we do not want.

2.99

The fallacy of the notion, that foreign nations will regulate their commerce for the purpose only of getting the specie in the United States, is demonstrated by the maxim advanced by the Committee. "That foreign nations will buy what they want, and will not buy what they do not want." Is not this concession sufficient to show, that our commodities stand on the only firm commercial ground; that foreign wants are the true pledges for our commerce, and that to surrender those pledges for an exclusive privilege at home, is a wild and unnecessary speculation. Do we mean by it to force them to buy what they do not want? That they will buy what they do want, is acknowledged. Money, intrinsically, is not a want, considered as currency; but the representative of wants. If a foreign nation does not want any of our commodities, and we cannot supply it with money to satisfy their wants by resorting to other countries, no commerce can exist between that nation and ourselves. If it does want any portion of the surplus useless to us, we must elect between the policy of encouraging its wants by exchanges which will supply our own, or discouraging a direct commerce by demanding money, which is of no use except to send to other countries to procure, indirectly, things to satisfy our wants. If we will not exchange the surplus of our industry for the surplus of their industry, we render it as impossible for foreign nations to take our surplus, as it would be for us to take theirs, without such an exchange. Money alone cannot sustain a commerce between two nations, even if both had gold and silver mines. To give money for money would be no commerce at all. Mechanical and agricultural commodities constitute the basis of exchanges, and these exchanges constitute the essence of commerce. As they are the means by which alone commerce can exercise its comfort-distributing office, to deprive it of these means, is evidently to stab commerce precisely in its vital part. Both are produced by people, both are manufactures, and exchanges of one for a surplus of the other, will equally reflect an additional value on both, as on any other exchanges of useless surpluses. Indeed, between them they comprise all things which can be exchanged, and therefore, a policy which asserts that it is wise to destroy exchanges of agricultural products for manufactures, asserts also that it is wise to have no exchanges at all. If it is the interest of any foreign nation to take an agricultural surplus of us, because they want it, we must also pursue our interest in taking of any foreign nation its manufactured surplus, should we want it. Neither surplus would be of any value except for such exchanges. The enquiry, which species of surplus may be most valuable to a nation, is worse than hypothetical, where one does not exist. It tempts a nation to lose an existing, in pursuit of an imaginary, surplus. Further, if we consider the skilfulness of all occupations in computing profit and loss, we may safely conclude that it has been applied to these two, so as to have produced an equilibrium of value between them. Suppose, however, we should obtain a mechanical in lieu of our agricultural surplus; would it promote or wound the interest of the mechanicks, still to adhere to the policy of discouraging exchanges? If this policy would discourage the production of a mechanical surplus, and render it less valuable, it must have the same effect upon the existing agricultural surplus. Even this hypothetical enquiry, would not result in the conclusion, that a mechanical surplus would have more effect in advancing the prosperity of a nation, than an agricultural surplus. Adam Smith observes, "that the interest of the land-holder is closely connected with that of the state, and that the prosperity or adversity of the one, involves the prosperity or adversity of the other." Malthus agrees with him, adding "that as the increase of the land-holder's capital increases population, improvements in agriculture, and the demand for raw materials by commerce, it seems scarcely possible to consider his interests as separated from those of the state and the people." It is therefore impossible that a mechanical surplus, should contribute more to the prosperity of a nation, than an agricultural surplus, even where they are equally attainable; but where they are not equally attainable, no policy can be worse than to break the right, and drive the wrong nail. If the English should by compulsory laws diminish their mechanical surplus, they would imitate our policy in diminishing our agricultural surplus; nor would their mechanical surplus be of any value, should they refuse to exchange it for such foreign surpluses as they want.

2.100

A single consideration will suffice to assuage our apprehension of a conspiracy among foreign nations, not to take our agricultural surplus in exchanges. Foreign commercial regulations are all made by governments for the purpose of getting money, and this end is a full security that none will be made, which by destroying commerce, would defeat it. They will never destroy their best instrument for fleecing industry, by an entire prohibition of exchanges; for though they will use it as far as possible for effecting transfers of property, yet they will never forget that actual commodities only, and not prohibitions, will bear shearing. Even those governments which manage commerce for the end of transferring property, will not kill it to effect that object, like our protecting-duty policy. If left free, it brings most comforts, but creates fewer exuberant capitals. Under the guardianship of domestick exclusive privileges, it transfers more property from the people, than it could do to foreign nations, if it was made free at home, to take every advantage of their conflicting and countervailing stratagems. Why should we buy the cunning of exclusive privileges to defend us against the cunning of foreign restrictions, when the domestick cunning will cost us more than the foreign cunning; like a man who spends his estate in learning of lawyers how to keep it? To make productive labour pay as much as possible to unproductive, is the European policy; that one should pay to the other only so much as is necessary to sustain a free government must be ours, or we must exchange those political principles which we have hitherto called free, for those which we have hitherto called tyrannical. If the two combatants were left to grapple upon these terms, victory would not be doubted; but productive labour having surrendered the armour of free exchanges, and her unproductive adversary having acquired that of exclusive privileges, she is easily chained to the property-transferring policy, like Hercules to the distaff of Omphale. His submission to the degradation cost him his life.

2.101

Exchanges of necessaries, conveniences, and especially luxuries, and not mere acquisitions of money, constitute the great impulse, which has caused human nature to make those exertions by which civilization has been extended, knowledge produced, refinements discovered, wealth obtained, and a love of liberty inspired. Leave this impulse undiminished; this moral steam-engine to operate; and its force will be sufficient to drive our commerce, our wealth, and prosperity along, in spite of all the little foreign currents setting in many different directions, which may endeavour to impede them. But take away from us this moral discovery, destined to be our glory or our shame, and we sink back into the mob of tyrannies, and lose at once these features of distinction, to which we have been hitherto indebted for our progress in arts and sciences, and for the share of reputation we enjoy amongst men.

2.102

The Committee conclude with a mental reservation, "out of deference to the opinions of those who differ from them," by observing that their bill is only "a foundation to be built on hereafter." If it would have been disrespectful to shock their opponents by a full display of their project, yet the concealment is not calculated to suppress apprehension or obtain confidence. How can the nation judge of an entire system, by inspecting an acknowledged fragment, better than they could of the size of a pyramid, by seeing one of its stones? How can taciturnity be examined? If the partial disclosure is awful and alarming, what must be the reservation? It would certainly have been divulged, had the Committee thought that it was calculated to win the favour of the public. Ought a nation to risk its own fate, by deciding without having the whole truth before it, and under the acknowledgement of a suppression, likely to be offensive? Our progress in imitating European governments, is sufficient to exhibit this something behind to our imaginations, as a dismal gulf, in which we can see no bottom; especially as the Committee allege that they are only driving on a wedge already entered. Is it not time that the United States should be informed how far the wedge is intended to be driven? Does not common prudence dictate the precaution of knowing how far it is intended to plunge us into the European policy, or ought we to plunge into it blindfold?

2.103

I have not left the report where the Committee have left their project, in the middle; but persevered to its end, endeavouring to select and examine its essential principles; and to anticipate some consequences, which the Committee have prudently concealed.

2.104

One paragraph, in reference to the cloud of pamphlets and essays, which have from the motives of love, pity, and friendship, been launched at the mechanicks and agriculturists. They so nearly resemble the eloquence in the Vicar of Wakefield, of Lady Blarney and Miss Carolina Wilhelmina Skeggs, from London city, that the intelligent and uncorrupted readers of these classes must very often have borrowed the exclamation of honest Burchell upon that occasion. Are these classes such children as to be seduced by promises and flatteries, like poor Olivia? A sample of this city reasoning, will suffice to show at what rate our rural understandings are estimated. Capital invested in factories, is liable to more risks, than that invested in agriculture, and therefore agricultural capital ought to pay bounties to factory capital. Old nations require a different regimen from young nations, and therefore, as we grow older, we ought to revive old abuses. The lands of Europe are exhausted by age, and therefore the inhabitants of our new and fresh country are able to bear heavier burdens than the Europeans. Agriculture is rich, because she is skimming the cream of a rich country, and she is poor for want of factories. As she is rich, she ought to pay bounties to the owners of factories; and as she is poor, the factories are necessary to make her rich. I will only confront these assertions by a few facts. Capital invested in agriculture, is exposed to equal risks, from fire and fluctuations in price, as that invested in factories. It is moreover exposed to numberless exclusive risks from bad seasons. Invested in either, it is equally exposed to want of industry or extravagance. It is better that each occupation should be its own insurer, than that either should be bribed by the other to become idle or wasteful. All occupations, calculate their risks, in fixing their prices, and this calculation is the only fair, honest, useful, and impartial underwriter of the risk attending each. All nations, at all times are composed of people of correspondent ages, equally young and equally old; and as one generation passes away, another succeeds, having the same wants, and the same capabilities. There are some principles always good, and others always bad. Time improves arts and sciences; it cannot therefore be made a good reason for reviving frauds and abuses. Time improves agriculture; therefore what are called old countries are more able to bear burdens, than those called new. The whole earth is of the same age. The soil of the United States being poorer and worse cultivated than that of many other countries, and of England in particular, the people are less able to bear taxes, and farmers have the more need for their small profit to improve it. Is it not therefore better for them to consider themselves as the Switzerland of the world, and to flourish by the principles objected to, because adopted in their supposed minority, than to ape the expensive policy of old England? If principles and the earth are deteriorated; if an existing generation must be pilfered and enslaved, because other generations have preceded it on the same surface; if improvements are to be abandoned because they are new, and errors revived because they are old; and if the people of a newly settled country ought to be grievously taxed, and subjected to exclusive privileges, because they are skimming its surface, because they are rich, and because they are poor; there remains no situation fit for liberty, and no age fit for political morality. When God gave a land to the Israelites flowing with milk and honey, he did not defeat his beneficence, by a revelation, that this milk and honey ought to be transferred from the nation to a few individuals, by heavy taxes and exclusive privileges.

Notes for this chapter

Thomas Robert Malthus (1766-1834), British political economist, wrote Principles of Political Economy (1820). He also wrote Observations on the Effects of the Corn Laws (1814) and Inquiry into the Nature and Progress of Rent (1815), and is best known for his Essay on the Principle of Population (1798).

End of Notes

The cuneiform inscription in the Liberty Fund logo is the earliest-known written appearance of the word "freedom" (amagi), or "liberty." It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash.